Perhaps you have heard of microlending. The idea is, hey: There are lots of people in countries like Bangladesh or Bolivia who could do something useful with $20 or $200 — buy some livestock, make some baskets, start a little shop. Those are all productive enterprises, and if these people could get loans to start them, they’d be able to pay the money back. Buy it’s not worth it for “real” lenders to bother with that. A $20 loan? In a place with no financial infrastructure? To somebody with no collateral? Wait, seriously, a $20 loan? No thanks.

Enter organizations like the Grameen Bank and FINCA. There are many more; microlending has been picking up steam for about two decades now. Most organizations give loans in the tens or hundreds of dollars, and most couple the loans with interesting social schemes: Grameen, for instance, requires that women apply for loans as a group. One woman gets hers first; she must pay Grameen back before her friends can get theirs. Voila — a little productive peer pressure.

Microlending isn’t a silver bullet. In fact, it’s doesn’t do much at all for the very poorest of the poor. But in terms of general economic development it works about as well as other strategies and, in addition, it confers an interesting aura of accountability and sustainability. It’s development aid perfectly in sync with the zeitgeist.

So, all of that is setup for Kiva, a tiny, brand-new microlending organization that adds another element of now-ness to the mix: the internet!

The deal with Kiva is that you can make a microloan yourself to one of several entrepreneurs in Uganda (for instance), and track their progress on the Kiva site. You will, in time, be repaid in full (although without interest).

Even (or maybe especially) sans interest, there’s something pleasingly mogul-like about this. I mean, how cool is it that you can personally fund a series of African startups? I realize it’s logically about the same as simply donating to FINCA or whatever, but there is something very compelling about a more direct connection. This is what Save the Children, et al, figured out so long ago, and it’s the insight Kiva now brings to microlending.

It is tempting, then, to say that this is the Web 2.0 of economic development, buuut it’s really not. (We will set aside the possibility that “the Web 2.0 of economic development” is a totally meaningless munging of catchphrases. Assume it implies something about participation, people working massively in parallel, openness, scalability, etc.)

This is because, from the looks of things, what really makes Kiva work is their liaison in Uganda: Zadock Moses Onyango. This is actually really excellent; it means Kiva is practicing good development, rooted in reality and local expertise. They have a smart local guy vetting lendees, and then keeping tabs on them and helping them write progress reports. That’s how ya’ gotta do it.

But, on the flipside, it does lack some of the infinitely-scaleable mojo of the Googleverse.

So let’s think about it. Kiva just launched; they’re on to something interesting. What might they do — what systems might they build — that would make it easy for this to leap beyond Uganda? If the Google Foundation ponied up ten engineers tomorrow, what could Kiva do with them? The answer could very well be “not much, sorry,” but I’m interested to know if the Snarkmatrix has any ideas…

(Ooh, also: Kiva has another innovation that is worth pointing out. Check out the awesome/creepy Harry Potter mugshots on the staff page.)

Update: Related notes on Kiva in this post on The Sharpener, but I’m not sure if they quite get at what I’m thinking about… and in trying to articulate it better, I think I’m curious about what the AdWords of microlending would look like. I think. Especially after reading this NYT article on how AdWords is teh most advanced AI evar.

Good points all, especially about the mug-shots – they are horribly compelling.

Kiva have apparently run out of businesses looking for loans because Daily Kos ran a story on it and dozens of their readers signed up at once. Clearly there’s a very big market out there for this kind of thing, which as you say is basically an extension of the “Your $10 apparently bought this one girl a new school textbook, so here’s a letter ostensibly from that same girl” tactics used by development charities. Building on this, one simple but incredibly important new innovation that Kiva introduces is the pictures of the businessmen and women looking for loans.

I think it scale quite well. I would have thought that there are useful, knowledgeable people like Zadock Moses Onyango scattered throughout countries like Uganda and it’s basically a question of making links with them and making sure they’re trustworthy.